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The Insolvency Service (IS) have published two important documents on insolvency law and policy. The documents contain a summary of responses to two recent consultations:
A number of new pieces of legislation have also been published:
"(a) provide that the reference to the Insolvency Rules 1986 (S.I. 1986/1925) in the Bank
Insolvency Rules includes all amendments to the Insolvency Rules 1986 up to and
including those made by the Insolvency (Amendment) Rules 2009 (S.I. 2009/642) and
the Insolvency (Amendment) (No.2) Rules 2009 (S.I. 2009/2472) (“the 2009 amending
instruments”) (rule 4);
(b) reflect amendments made to the Insolvency Rules 1986 by the 2009 amending instruments (rules 49, 51, 60, 62, 63, 65-67, 74, 75, 78 and 82);
(c) make other minor amendments to the Bank Insolvency Rules; and
(d) correct minor drafting errors."
(a) receive compensation for their lost deposits as soon as possible after the building society goes into building society insolvency; or
(b) have their account transferred to a different building society.
This is the first objective of the building society insolvency process.
The procedure can only be initiated by the Bank of England or the Financial Services Authority
(“the FSA”) by application to the court. The court then makes a building society insolvency order,
appointing a building society liquidator. In the initial stages, the building society liquidator is
accountable to a liquidation committee formed of the FSA, the Bank of England and the FSCS.
Once the building society liquidator considers that the first objective is achieved, the liquidation
committee will pass a resolution to that effect and the building society insolvency will move to the
second objective which is to wind up the affairs of the building society so as to achieve the best
results for the creditors as a whole.
The Rules are based on the Insolvency (Scotland) Rules 1986 and certain provisions of the 1986
Rules are applied to these Rules, subject to a number of general and specific modifications."
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...